Risk appetite on the rise

In the first of a weekly series looking at how investors view the market, Financial News talks to Putnam's Jeff Knight

By

Renée Schultes

Updated: July 23, 2007 5:00 a.m. GMT

Correlation is every asset allocation fund's worst nightmare. Jeff Knight, who runs $17bn (€12.3bn) in asset allocation funds at Boston-based Putnam Investments, knows this well. He believes the record liquidity levels have led to an expansion in investors' risk appetites.

Knight said: "If you expect high correlation, beta has to be focused on the front of the yield curve, you should be light on credit risk and in strategies that...